The Negotiation Culture: The Approach That (Might Have) Resolved The Strike

But what broke the impasse? Writers’ dwindling bank accounts? The studios’ mounting revenue losses? The Oscar telecast? While all of these elements were contributing factors, there’s no doubt that the addition of studio principals to the negotiations made all the difference.

Several weeks ago, Alfredo Barrios, a former corporate lawyer turned writer and WGA strike captain, posted a missive on a pro-WGA blog, unitedhollywood.com urging that studio principals become directly involved in talks in order to restart negotiations. Regardless of which side you’re on, and despite Alfredo Barrios’s obvious bias in favor of striking writers like himself, Barrios eloquently describes the “psychology” of the deal for both sides; a mindset that ultimately required the principals to take the lead in strike negotiations.

The following is an edited version of Barrios’s post. You can read it in its entirety here.

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BASIC RULES
First, understand the relationship between Nick Counter and the studios. It’s essentially a lawyer-client relationship. The AMPTP is run by lawyers like Nick Counter and Carol Lombardini. Think of it as an in-house law firm. Their goal is to “negotiate” deals with unions on behalf of their clients – the studios.

As lawyers, Counter and Lombardi have to justify their paycheck. What does that mean? They have to add value. They’ve promised to deliver a more favorable labor deal than the studios would get without them. Otherwise, there would be no point in hiring them (or more aptly, keeping them around). So our loss is their gain. And the bigger our loss, the bigger their gain.

Now here’s the thing to remember, fairness and reasonableness have NOTHING TO DO with their approach. No corporate lawyer I’ve ever known has ever met with a client and promised to get them the most “fair and equitable deal” possible. That’s not their goal. Instead, they promise to save them a lot of money – remember, added value. If the studios were genuinely interested in reaching a fair and equitable deal, the CEOs and their CFOs would talk directly to our negotiating committee and financial people, and a deal could be reached today – by the way, this is what we’re driving towards. We will know we will have won when the CEOs and their CFOs talk to us directly. [Editor’s Note: as we all know now, this is what happened here].

CEOs hate uncertainty. They run their businesses based on long-range plans that are based on long-range assumptions. So as a lawyer, you do your very best to put their mind at ease when faced with an inherently unstable situation – be it a lawsuit, a takeover deal, or a strike. You say to them, “You don’t have to worry about a thing. We have this under control.” Then you spell out what you believe (more often hope) is the most likely outcome. “We feel confident that we can get this suit dismissed at the pre-trial stage;” “ get this deal closed by Christmas;” “resolve this strike by_______ on ________ terms.” The CEOs nod their heads happily, confident that their well-heeled, well-paid lawyers are looking out for their interests, and then go about their business.

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Going back to CEO peace of mind. This comes in a couple of forms. First, lawyers tell their clients that they won’t have to get their hands dirty. Lawyers will be the bad cops on their behalf. They’ll serve as a shield for their clients. Lawyers always want their clients to feel comfortable – that’s part of what’s promised. “Go about your life. Don’t worry about a thing.” Second, it comes in the form of laying out how things will play out. “You can expect that the plaintiffs will engage in several months of discovery;” “the company you’re hoping to acquire will seek a white knight;” “the strike will lose steam and the writers will fragment.” All things that have a very good chance of happening. And when they do, the lawyer looks like a genius, and his client thinks, “Man, I’m in really good hands. I have nothing to worry about.” It’s about managing expectations.

THE LAWYER’S STRATEGY

Lawyers try to do three things to their adversaries: (1) get them to doubt the validity of their position; (2) undervalue whatever cards they’re holding (in other words, underestimate whatever leverage they have); and (3) kill their resolve.

How does a lawyer get an adversary to doubt his position? Well, in litigation, it comes by spinning the facts. In transactional deals, by spinning the financial numbers. And in a strike situation, by spinning both. One common technique is making a nonsensical argument so many times that it begins to take on the air of a legitimate one and eventually some people (judges, jury, the public in general and sometimes even your adversaries) begin to accept it as truth. Lawyers are masters of this. Think of these doozies: “If the glove doesn’t fit, you must acquit;” “Smoking doesn’t cause cancer;” and my personal favorite, “We don’t have a business plan for or any real revenue from the Internet.” Or how about that $130 million offer that the studios supposedly made us several weeks back? The one that didn’t actually add up. Facts and numbers are spun every day in the courtroom, in the negotiating room and in the press by lawyers.

Now, here’s the thing to remember. It’s the lawyer who does the spinning. No CEO wants to do it. Why? Because so many of them want to be known as “straight shooters” – i.e., guys who don’t lie. Plus, they like to be liked. And going out and spinning facts and numbers… well, that’s like acting like a lawyer. Like Nick Counter. That’s why they hired him to do it. They want to be comfortable. Notably, neither Counter nor any of the CEOs has actually done any real press interviews to defend their position. Not hard to see why: it’s utter nonsense. So they spin in press releases or “leaked” stories that are regurgitated by mouthpiece trade papers and other seemingly “unbiased” but wholly bought off parties.

And how does a corporate lawyer gets an adversary to lose confidence in whatever leverage he has? One way is to engage in positional bargaining. That means anchoring your negotiating position to an extreme and unprincipled number over such a long period of time that your adversary starts to doubt the cards he’s holding and eventually moves off of his number and gets closer to yours. That’s what the AMPTP has been attempting to do with its new media proposals – or actually, lack of proposals. They’ve anchored to basically zero payments for new media in the face of our fairly principled new media proposals. They’re hoping that doubt will creep into our psyche – “Wow, man, those companies are really holding to that number, maybe our bargaining position isn’t as strong as a I thought. Maybe we should take whatever the DGA gets.” And so on…

Once you start down that path, you’re losing your resolve. The corporate lawyer knows you’ll start to rationalize why you should take a really bad deal. And you start to buy into the arguments he’s making – “That lawyer of yours isn’t doing you any favors.” “I hate to tell you this, but you’re wasting a lot of time and energy with this case. It’s a loser.” “As a guy who knows, you should take what we’re offering you because it’s not going to get better.” Sound familiar? It’s the sort of stuff being put out by the AMPTP’s PR guru, Chris Lehane, who, by the way, is also a lawyer – and a classmate of mine from law school. Small world, huh? Couple this psychological warfare with the increasing expense of fighting… and people will crack.

Posture and overwhelm with superior power – or the semblance of power. That’s Corporate Lawyering 101.

So… how do we win?

OUR STRATEGY

In my experience, the guys that win against corporate lawyers and their clients – and believe me, I’ve seen it happen – are the guys that (a) never lose sight of their cards – in other words, aren’t fooled into believing that they’re holding garbage, and (b) play lots of offense.

I’ll begin with playing offense. That means taking the fight to the other guy’s client – the decision makers – the CEOs. Remember, THEY LIKE TO BE COMFORTABLE. That’s what their lawyer promised them they would be. So how do you take the fight to them? Well, in litigation, you bring them into the game by making them the target of discovery – you depose them, go through their papers, ask them all sorts of question. You take them out of their comfort zone. You make them the focal point of the case… they’re the bad guy. In transactional matters, say a takeover attempt where you represent the buyer, you go after the “entrenched management” that wants to deprive the shareholders of the real value of their holdings… they’re the bad guy. In a strike, you hold the CEOs accountable. Why? Because they are ultimately the bad guys… the buck stops with them, and they need to be reminded of that always. Counter is just their hired gun.

And by taking the fight to them. I mean, maintaining picket lines at the studios at peak levels, relentlessly picketing locations, continuing to put out creative videos that entertain and inform people about the strike, denying waivers to award shows and picketing those shows, seeking alternative ways to put out creative work on the Internet for pay, etc.

Playing this kind of offense serves a couple of purposes. First, when a CEO drives through the studio gates, or hears about how a location shoot was impacted by picketing (like for example, when an actor leaves the set or a day has been added to the schedule), or sees how his untenable bargaining positions are being ripped apart on websites, or is told about how his award show is falling apart, or reads how Google is about to form a competing entertainment powerhouse, it all collectively begins to call into question the promise that Counter made – i.e., that we would crumble. It’s a daily reminder that we are not losing our resolve. It makes him worry. His expectations aren’t being met. Things are uncertain again. And it begins to chip away at Counter’s credibility as the guy who could resolve the strike with minimal inconvenience to the studio CEOs.

This last point is important. Why? Because the way you win is by taking the lawyer out of the equation. Deny him the promise that he made to his client – i.e., that he would add value by battering all of us down. Once the CEOs begin to believe that we’ll stick to our guns until we get a fair and equitable deal, that’s when we’ve won. That’s when the CEOs and their CFOs will step in and begin to deal directly with us. Why not Counter? Because his job wasn’t to deal with real and fair numbers; it was to screw us. Once he fails at that, it’s time for others to step in. Trust me, it happens.

But it requires believing in the cards you’re holding – your leverage – and sticking it out. The bigger the show of resolve, the faster the CEOs will dispatch Counter. As profit losses mount and their share prices take bigger hits, the studios will realize that holding out for Counter’s promise looks increasingly like a fool’s game.

But the CEOs will only step in if they believe a fair a reasonable deal can be reached. That’s why it’s important to always maintain principled bargaining proposals on the table – as I believe we have throughout. Unlike Counter, I don’t believe we’re engaging in the positional bargaining. Having said that, I think we made one very serious mistake in continuing to keep our DVD proposals off the table. Bad faith bargaining – like the type that Counter has engaged throughout – can never be rewarded, and I have heard no compelling reason to keep our DVD proposals off the table.

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As for acting like “nicer” and “more accommodating” guys and gals… Well, let me just say that in all of my years as a corporate lawyer, “nice” and “accommodating” adversaries who never stuck to their guns and didn’t bring the fight to us never got better deals. They only get worse ones. So don’t buy into the our leadership’s too militant line of argument. They’re not. They’re being appropriately tough. Trust me, you wouldn’t want it any other way. Now it’s up to the rest of us to hang tough with them.

Your column could have been titled “Why most people hate lawyers?” I think that Barrios describes the general belief that most people have that lawyers are not deal makers. Rather, in many cases, they represent an impediment to a win-win conclusion of most negotiations. It seems that in many high-stakes situations, most lawyers aim for a zero-sum gain situation.

Your column could have been titled “Why most people hate lawyers?” I think that Barrios describes the general belief that most people have that lawyers are not deal makers. Rather, in many cases, they represent an impediment to a win-win conclusion of most negotiations. It seems that in many high-stakes situations, most lawyers aim for a zero-sum gain situation.

gosh but like we spent hundreds of years looking up at the stars and wondering “is there anybody out there” and hoping and guessing and imagining

because we as a species were so lonely and we wanted friends so bad, we wanted to meet other species and we wanted to talk to them and we wanted to learn from them and to stop being the only people in the universe

and we started realizing that things were maybe not going so good for us– we got scared that we were going to blow each other up, we got scared that we were going to break our planet permanently, we got scared that in a hundred years we were all going to be dead and gone and even if there were other people out there, we’d never get to meet them

and then

we built robots?

and we gave them names and we gave them brains made out of silicon and we pretended they were people and we told them hey you wanna go exploring, and of course they did, because we had made them in our own image

and maybe in a hundred years we won’t be around any more, maybe yeah the planet will be a mess and we’ll all be dead, and if other people come from the stars we won’t be around to meet them and say hi! how are you! we’re people, too! you’re not alone any more!, maybe we’ll be gone

but we built robots, who have beat-up hulls and metal brains, and who have names; and if the other people come and say, who were these people? what were they like?

the robots can say, when they made us, they called us discovery; they called us curiosity; they called us explorer; they called us spirit. they must have thought that was important.

and they told us to tell you hello.

So, I have to say something.

This is my favorite post on this website.

I’ve seen this post in screenshots before, and the first time I read it, I cried. Just sat there with tears running down my face.

Because this, right here, is the best of us, we humans. That we hope, and dream of the stars, and we don’t want to be alone. That this is the best of our technology, not Terminators and Skynet, but our friends, our companions, our legacy. Our message to the stars.

I’m flat out delighted, and maybe even a little honored, that I get to reblog this.